Yes: Billions in agriculture subsidies could face the chopping block

posted at 11:41 am on June 4, 2012 by Erika Johnsen

While the economic malfeasance of agricultural subsidies may be relatively low on the totem pole of the federal government’s massively wasteful and intrusive spending binge (we’ve definitely got some bigger fish to fry), they are in and of themselves astoundingly terrible ideas that come with a whole host of neighborhood effects. From toying with market signals and inflating food prices; to inhibiting free trade that would benefit the poverty-stricken worldwide; to encouraging overproduction that degrades the environment: they’re just bad news. No American industry has been so persistently coddled as agriculture, helping out niche groups and special interests in the short term but making us all worse off in the long term.

So it warms my heart that, in this dire age in which extreme rent-seeking has become a trendy political sport, the costly implications of farm subsidies are at least open for discussion as a way to better the budget (even if this bill would also start pushing more money into crop-insurance subsidies, and predicted government “savings” so often aren’t… but hey, little victories, right? Right?)

The Senate is expected to begin debate this week on a five-year farm and food aid bill that would save $9.3 billion by ending direct payments to farmers and replacing them with subsidized insurance programs for when the weather turns bad or prices go south.

The details are still to be worked out. But there’s rare agreement that fixed annual subsidies of $5 billion a year for farmers are no longer feasible in this age of tight budgets and when farmers in general are enjoying record prosperity.

About 80 percent of the bill’s half-trillion-dollar cost over the next five years represents nutrition programs, primarily food stamps now going to some 46 million people. About $100 billion would be devoted to crop subsidies and other farm programs.

The Senate Agriculture, Nutrition and Forestry Committee last month approved a bill that would save $23 billion over the next decade by ending direct payments and consolidating other programs. The bill would strengthen the subsidized crop insurance program and create a program to compensate farmers for smaller, or “shallow,” revenue losses, based on a five-year average, for acres actually planted. …

The Agriculture Department says that in 2011 the government paid farmers about $10.6 billion, including about $3.6 billion for conservation programs, some 10 percent of the farm sector’s record-high net cash income of $108.7 billion. …

Not exactly the agricultural overhaul of my small-government dreams, but I suppose some scrutiny is better than no scrutiny. Agriculture is too tied up with expensive, competing, convoluted subsidies, and it’s been on the receiving end of untoward special treatment since before the Great Depression.

If you’re at all familiar with my past work over at Townhall, you may know that I’ve never met a subsidy I didn’t like… to absolutely rag on. I have a lot of trouble thinking up reasons to justify subsidies — their primary function is to distort market signals, no if’s, and’s, or but’s about it. Agricultural subsidies are particularly egregious, and they so aptly demonstrate how a lot of politicians will talk a big game about cutting down on pork, but if they happen to be from a farm-heavy state, they can magically think up excuses for why agricultural subsidies are so necessary. Everybody wants to cut spending, just not spending that benefits them.